Tuesday, 22 April 2008

Staff lay-offs on the increase

Staff lay-offs may seem like a relic of the 1970s and 80s, but in today’s tough business world, they could be set for a comeback. It's already clear that 2008 is proving to be an extremely difficult year for local companies, and our Employment Law Specialist, John Mehtam, said businesses should beware.

“Many businesses are in the unenviable position of looking for cost savings, and the payroll may seem like the most obvious place to start. So do you have to make people redundant, or can you simply lay-off your staff until things improve?”

John said a redundancy was a permanent solution to the problem, where the need for the work the employee was doing has ended, and an easier option may be to lay off several members of staff, which was a more temporary move.

Another option is to ask your staff to work fewer hours in a week than usual, and then they're considered to be on short time. “But of course it’s not that simple, because you can only lay someone off or put them on short time working if you have the right to do so in their employment contract.“Even if you don’t have the contractual right to lay anyone off, it may be worth asking your staff to agree to it. You could explain that if they’re laid off for a few days, you’re far more likely to be able to keep them on in the longer term.

“This can be a risky strategy though, and you must make sure you get the employee’s written consent. These are short-term measures, but they could help to ease your company through the difficult times.”